Some 60% to 80% of ongoing costs for electric generators and somewhat lower percentages for energy intensive industries are made up of fuel. For electric utilities and IPPs fuel purchasing also tends to be the greatest source of troubled relations with vendors and suppliers. It is also an area where in many instances management improvements with little or no capital cost can result in significant cost savings.

Fuel purchasing is a function where it is critical that all levels of management understand the fundamentals of the market. Unfortunately it is also a subject upon which there is a great deal of mythology in the business press with discussions of subjects such as the imminent advent of “peak oil” or “peak gas.” All too often judgment on fuel purchasing is made in response to such media discussion.

The goal of the workshop is to provide an understanding of how global markets for oil, gas and coal work. This involves an examination of market fundamentals: reserves, the cost of production, and demand. Also included is a discussion of how environmental concerns play an increasing role in inter-fuel competition.

The workshop includes an examination of the rise and importance of paper markets in oil, coal and natural gas, first in North America and Europe, and now developing gradually in Asia, Africa and Australia. There is a critical analysis of how price data is gathered for oil and coal and then published and the role which derivative markets play in spot market pricing.

The various factors which play a role in the development of a purchasing strategy will be reviewed. Ultimately the various factors boil down to trade-offs between supply security and price. Utilities with access to nuclear hydro power may have greater freedom to buy more spot coal or oil in times of soft market conditions. In other instances, the existence or absence of local resource may play a major role in shaping decisions about fuel selection and combustion technology. Increasingly government policies driven by environmental concerns are playing a role in fuel selection and efficiency of fuel use.

Fuel contract design and language is a major part of the workshop. We shall examine alternative wording for contract fundamentals dealing with volume and quality. Pricing provisions will be an important part of the discussion. Indexation to published prices, long common in the oil markets is becoming increasingly common for coal in Asia. For almost a decade it has been the norm in the European coal market. Although pricing is increasingly determined by reference to published indices, it continues to be important for the buyer and seller to agree to the details of the force majeure, dispose resolution and termination provisions. As well, in order to avoid the risk of disputes and misunderstandings, contracts should carefully define provisions for custody transfer, quality testing and weighing.

The focus of this Master Class will be on fossil fuels purchasing: coal of various sorts, natural gas (pipeline and LNG) fuel oils and if there is participant interest, biomass purchasing can be included. The geographic focus will be South and East Asia, Africa and South America. Experience from North America and Europe will be drawn upon if it is particularly relevant to these other markets. Principals and techniques covered will be applicable to utilities, IPPs, large industrial fuel users such as cement and chemical plants. The Workshop will span a broad range of issues from the primary factors driving global fossil fuel markets and national energy security to the details of drafting effective fuel purchase contracts. Contracted provision language will be drawn from a library of over 300 international fuel contracts. The rising impact on fuel markets of renewables and environmental concerns.

In this master class we will be discussing the market movement of both conventional fuels (Oil, coal, gas/LNG) and renewable resources which are used for power generations. We will explore many purchase strategies and analyse tradeoff between supply security and pricing. Various hedging techniques will be discussed together with the drivers of price volatility. Contracts provisions will also be an area of focus in this master class in order to cope with volume and quality shortfalls.

Global Market Basics:

We will focus on the fundamentals of supply and demand: the size and location of the reserve base, production costs and the interaction between demand and price. While short-term price changes are often the reaction to geopolitical or financial events it is possible to pick out clues to form an understanding of the longer term direction of fossil fuel prices. An assessment of decades of prices enable a much better understanding how price changes in oil, natural gas and coal impact on one another. Environmental concerns increasingly play a role in fuel selection and inter-fuel competition.

Choice of Purchasing Strategy:

For IPPs the choice of purchasing strategy (mixture of short-term and long-term contracts) is often a product of the security concerns of the banks and the economic needs of the project developers. For utilities the trade off is between price and the need for security of supply (which may vary with season and type of fuel). Other considerations, such as availability of hard currency or a desire to foster regional economic development may also play a role. Industrial fuel purchasing is subject to the price and flexibility needs of the ultimate product produced, e.g., cement, chemicals, pulp, and paper. Many buyers of all types are increasingly using derivative markets to dampen price volatility and to provide greater price predictability.

Prices and Hedging

Trend in recent years for all fuels has been to short term pricing (quarterly or monthly) even in long-term contracts. Energy indexes are attracting increasing interest from regulators in the US, Europe and Asia. This is accompanied by the rise of paper markets for all fuels. There is a great importance of paper markets in Europe and the US and gradual development of derivatives trading in oil and coal in Australia, Singapore, China, etc. In the midst of this new financial legislation in the US (Dodd-Frank) and proposed in Europe will alter derivatives trading globally.

Major Contractual Provisions

Experience shows that things go unexpectedly wrong in many medium and long-term fuel purchasing arrangements. The goal is to build a contract structure which is not only fair to both the buyer and the supplier but also robust enough to withstand the numerous problems which will arise during the course of a long-term business relationship. Even spot purchase contracts are about much more than price. Real world outcomes indicate that things frequently can go wrong: mines flood or have strikes; trains derail; and coal loaders break down; natural gas fields have unanticipated production problems. Contracts should cope with all of the volume and quality shortfalls in the product that can be anticipated. There should also be clearly defined dispute resolution mechanisms which allow for timely settlement of contentious issues.

Fuel Suppliers (Fossil AND Renewable)

This entire workshop focuses on the contract and rationale governing Fuel Management Programme. Understand Buyer decision making process and it translate into the contract and negotiation phase. In an interactive mode, it will navigate through important provision of a Fuel Supply Contract. Manfred Raschke has worked on energy projects worldwide since 1987.

Companies with substantial amount of Fuel usage

Many industries uses fossil fuel as primary means of energy generation in their production/manufacturing process. Learn how you can streamline your decision making process, and garner substantial saving on your fuel cost.

Electric Company Executive

IPPs and Utilities utilize large amount of fuel to meet the rising energy demand in Asia. This workshop covers every relevant aspect of your undertakings on Fuel Management: We will also compare the usage of conventional fuels and their renewable counter part. All key contracts, the comparative experience distilled from more than 50 countries worldwide. This is adapted specifically for the Asia.

Ministry officials and Energy Regulators

Bank and Financial Institutions

This workshop will show the economic reasoning behind fuel/energy supply project. Understand how their performance and contract formation can impact your risk assessment on decision to lend. Understand where are your “loaned” money going to, and its implications.

New Ventures

For entities evaluating entry into Fuel Supply business, but does not know what are its pitfalls and challenges, this workshop will present and dissect the business from conception to operationally ready state.

The trainer has 32 years of experience in project development and market analysis in global fossil fuel markets. He has been involved with every type of fossil fuel (including orimulsion and oil shale) in some 50 countries and six continents. In Asia, where most future growth in fossil fuel demand is expected to occur, he has been involved with mine and generation projects in China, India, Indonesia, Philippines, Sri Lanka, Pakistan, Taiwan, Malaysia, Thailand, Vietnam and Mongolia. Dr. Raschke’s experience in fuel purchasing and mine development has been enhanced through serving as an expert witness in numerous litigation and arbitration assignments dealing with commercial terms and conditions in fuel supply agreements. He is currently writing a book on the future outlook for fossil fuels.

Academically, he has had Post-graduate fellowships and research grants at the Academia Britannica, Rome, Italy; British Institute, Athens Greece; German Academy, Cairo, Egypt; Oxford University, Oxford, U.K.; and the India Office, London, U.K. He has held Teaching Fellowship and Professorship at various institutions (UC Davis, CA; Duke, NC; and Harvard, MA). He holds an Economic History PhD from Harvard.

The commercial and operational practices of the oil and gas industry pose unique challenges to accountants who need to operate under multiple reporting frameworks with conflicting accounting methods and with unique contractual arrangements such as production sharing contracts and joint venture arrangements. This four-day course focuses on the accounting issues currently faced by the upstream oil and gas with an emphasis on operations under Production Sharing Contracts. It is intended to provide an in depth look at the accounting for these unique arrangements and helps you and your team put them into practice.

Specific areas treated include:

Property, plant and equipment

Intangibles and in particular exploration and evaluation activities

Oil and gas reserves

The challenges posed by impairment reviews

Provisions, particularly decommissioning costs

Joint venture and production sharing agreements

Financial instruments and application of hedge accounting treatments

This course is kept up to date with developments in best practices and evolution of accounting standards.

This four-day course focuses on the accounting issues currently faced by the upstream oil and gas with an emphasis on operations under Production Sharing Contracts. It considers the accounting and financial reporting implications of all the main transactions undertaken in the upstream business, including cost allocation and capitalisation, revenue allocation and the accounting issues faced by joint venture operations and operators of concessions and PSC’s. The course considers both internal accounting issues and financial reporting under US GAAP and IFRS frameworks.

The course will include a wide range of learning and development approaches including:

The traineris an accounting and finance professional with nearly thirty years’ experience. For the past twenty years he has specialised in consulting and the delivery of in- house and public financial training delivering programmes in accounting and financial management. During this time he has worked across many sectors and in many countries.

Within the oil, gas and petrochemicals sector he has worked on accounting and performance issues with finance teams from Shell, Saudi Aramco, Tyumen Oil, DuPont and British Gas.

Previously as a senior consultant with PwC he led a team of financial training consultants responsible for developing and delivering programmes in financial management, accounting and shareholder value.

He started his career at PwC, where he worked for eight years in London in their audit and business advisory division where he obtained his chartered accountancy qualification. After qualifying he was seconded for two years to their Paris office. On his return to London from Paris he co-founded the client training business for PwC in London. The trainer now runs a successful financial training company based in the UK and splits his time between managing that business and instructing on Oil & Gas Accounting and IFRS.

The trainer is a Fellow of the Institute of Chartered Accountants in England and Wales, a member of their finance and management faculty and has an Honours Degree in Economics from BristolUniversity.

“The trainer’s training is a big help in identifying the issues to focus on for the coming year!”

– Head of Financial Reporting, an E&P Company in Southeast Asia

“The trainer’s is not only an excellent presenter with comprehensive knowledge in the area of oil & gas accounting, but he has a very detailed understanding in both US GAAP and IFRS. I will definately consider more courses with the trainer in the future”

– Head of Accounting, TAQA, UAE

“A well-organized training. The trainer is a good teacher who presents in-depth materials and concrete examples with easy to understand English for full understanding of what was being presented”

– Finance & Account Manager, Damagix Nigeria Ltd

“Once again, The trainer’s presentation style and good use of case studies was very well received by our accounts staff”

– Accounts Manager, Rak Petroleum

Attendee Profile

Who Should Attend

The course will be of benefit to all finance and accounting professionals who require an in depth understanding of oil and gas accounting procedures including those involved in the preparation, audit or analysis of oil and gas accounts.

Planned STOs are required for plants or distribution facilities to carry out their scheduled preventative, regulatory or engineering work. The purpose of STOs is to maintain the equipment reliability, improve safety and ensure efficient operation while also assuring critical regulatory requirements are achieved. A STO activity is a very important function that has a direct impact on profitability of a plant’s production and maintenance costs which result from the expenditure of manpower, equipment and materials. Proper work preparation and scheduling can result in a significant “ROI”. The ROI is a direct result of savings associated with manpower costs, minimization of STO and efficient controls. Quality STO management can minimize the possibility of accidents, rework, equipment failure, and reduce the impact on manpower safety, equipment and operation safety. A focus on excellent STO planning and execution is therefore crucial for the safety, throughput and cost effectiveness of all asset intensive organisations.

From this workshop, you will be exposed to detail steps and strategic techniques necessary to improve your STO management with effective completion in Oil, Gas and Chemical industries. You will also have the opportunity to participate in table top exercises, scenario discussions and networking amongst other industrial experts.

Developing competitive mining regime based on emerging trends, economic equality and technology development

Keynote Speakers

Overview

As Africa moves forward with their mining development initiatives, global investors are starting to realize the vast potential of this untapped market to greater heights. The resource rich African market are continuously welcoming investors that is keen to unlock and understand the investments and environmental concerns of many African countries.

The Africa Mining Investment & Development Summit 2013 will be held in Accra, Ghana on 9th to 11th July 2013. We will provide insights from various stakeholders, have extensive understanding of the mining and investment potential of Africa, and resolve challenges and barriers that will be encountered along the way. We aim to provide a platform to learn from Africa mining industry’s pioneers and new entrants.

Together with Neoedge’s line of premier conferences, we aim to bring mining industry’s best speakers and delegates. Network with not only the mining and mineral exploration companies but expect to meet regulators, engineering support companies, upstream and downstream mining sector infrastructure development organizations, financial institutions, advisory and consultancy firms.

Make the move towards the next big thing in Africa.

The following key themes will be addressed in depth with Real Examples and Case Studies: